SPAC (Special Purpose Acquisition Company)

A Special Purpose Acquisition Company (SPAC) is a type of company created specifically to raise money through an initial public offering (IPO) to acquire a private company. Essentially, it’s a shell company that goes public with the sole purpose of finding and merging with a private business, allowing that business to become publicly traded more quickly than traditional routes. Investors buy shares in the SPAC, often to gain access to potential high-growth companies. If the SPAC fails to find a target within a set timeframe, it typically returns the invested money to its shareholders.